IGI Securities Limited – Commodity News

Karachi, June 26, 2018 (PPI-OT): Silver

Technical

Silver markets went back yesterday, reaching towards the $16.50 level above, and then pulling back to the $16.30 level. The market continues to go sideways in general, and that it is only a matter time before it break above the $16.60 level and continue to go towards the $17 level. However, if it break down below the $16.20 level underneath, the market could go down to the $16.00 level next. Expect a lot of noise, but that’s typical. Economists think that the market has a couple of different outlooks here. However, for a shorter-term trade, it should employ a reasonable range bound system, using the $16.50 level above as a significant resistance barrier that extends to the $16.60 level, and the $16.20 level underneath is the base. Going back and forth with some type of indicator like a stochastic oscillator could be a good way to play this market.

Highlights

Silver fell 0.8 percent at $16.31 an ounce and July Comex silver was last down $0.144 at $16.315 an ounce

Silver is sensitive to moves higher in both bond yields and the U.S dollar

A rise in U.S rates, lift the opportunity cost of holding silver as it pays no interest

Federal Reserve continues its plan to raise benchmark interest rates, that is bullish for the greenback

Unilateralism is on the rise and trade tensions have appeared in major economies

Fundamentals

Silver prices were modestly lower in early-afternoon U.S trading yesterday. Silver is at the bottom of its recent trading range. Silver continue to act more like raw commodities than like safe-haven assets. There was a modest flight to safety in the markets.

A general sell-off in the raw commodity sector today weighed on the precious metals markets. World stock markets were mostly down today. An escalating trade dispute between the U.S and China, the world’s two largest economies continues to rattle world markets, but not yet providing much support to safe- haven silver markets.

Silver continue to want to act like commodities and trade with their commodity counterparts, instead of trading like safe-haven assets. A stronger dollar makes silver more expensive for holders of foreign currency.

Looking across the raw commodity price spectrum, most markets are down today, mainly on U.S and China, worldwide trade war worries that could curtail demand for raw commodities.

Silver prices struggled to catch a bid on safe-haven demand despite rising trade tensions between the U.S and its allies as expectations for a faster pace of U.S rate hikes kept a lid on the white metal’s push higher.

The U.S is reportedly drawing up plans to block firms with at least 25% Chinese ownership from buying U.S companies with industry changing technology, raising the risk of countermeasures from Beijing. The US yield in the 10-years was lower by 2pbs at 2.87% and within the day’s rage of 2.86%-2.89%.

Expectations for a faster pace of U.S monetary policy, however, appeared to remain intact, raising the prospect of further dollar strength in the near-term, which some analysts have highlighted as the main headwind weighing on silver.

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IGI Securities Limited – Commodity News

Karachi, June 26, 2018 (PPI-OT): Silver

Technical

Silver markets went back yesterday, reaching towards the $16.50 level above, and then pulling back to the $16.30 level. The market continues to go sideways in general, and that it is only a matter time before it break above the $16.60 level and continue to go towards the $17 level. However, if it break down below the $16.20 level underneath, the market could go down to the $16.00 level next. Expect a lot of noise, but that’s typical. Economists think that the market has a couple of different outlooks here. However, for a shorter-term trade, it should employ a reasonable range bound system, using the $16.50 level above as a significant resistance barrier that extends to the $16.60 level, and the $16.20 level underneath is the base. Going back and forth with some type of indicator like a stochastic oscillator could be a good way to play this market.

Highlights

Silver fell 0.8 percent at $16.31 an ounce and July Comex silver was last down $0.144 at $16.315 an ounce

Silver is sensitive to moves higher in both bond yields and the U.S dollar

A rise in U.S rates, lift the opportunity cost of holding silver as it pays no interest

Federal Reserve continues its plan to raise benchmark interest rates, that is bullish for the greenback

Unilateralism is on the rise and trade tensions have appeared in major economies

Fundamentals

Silver prices were modestly lower in early-afternoon U.S trading yesterday. Silver is at the bottom of its recent trading range. Silver continue to act more like raw commodities than like safe-haven assets. There was a modest flight to safety in the markets.

A general sell-off in the raw commodity sector today weighed on the precious metals markets. World stock markets were mostly down today. An escalating trade dispute between the U.S and China, the world’s two largest economies continues to rattle world markets, but not yet providing much support to safe- haven silver markets.

Silver continue to want to act like commodities and trade with their commodity counterparts, instead of trading like safe-haven assets. A stronger dollar makes silver more expensive for holders of foreign currency.

Looking across the raw commodity price spectrum, most markets are down today, mainly on U.S and China, worldwide trade war worries that could curtail demand for raw commodities.

Silver prices struggled to catch a bid on safe-haven demand despite rising trade tensions between the U.S and its allies as expectations for a faster pace of U.S rate hikes kept a lid on the white metal’s push higher.

The U.S is reportedly drawing up plans to block firms with at least 25% Chinese ownership from buying U.S companies with industry changing technology, raising the risk of countermeasures from Beijing. The US yield in the 10-years was lower by 2pbs at 2.87% and within the day’s rage of 2.86%-2.89%.

Expectations for a faster pace of U.S monetary policy, however, appeared to remain intact, raising the prospect of further dollar strength in the near-term, which some analysts have highlighted as the main headwind weighing on silver.

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